Which of the Following Is Most Correct with Respect to the Use

question 35

Multiple Choice

Which of the following is most correct with respect to the use of analytical procedures?

• A)Analytical procedures may be used in evaluating balances in the testing phase as long as the auditor also uses them in assessing the going concern assumption.
• B)Analytical procedures must be used throughout the audit.
• C)Analytical procedures used in the testing phase of the audit are primarily used to direct an auditor's attention so that the auditor's understanding of the business is improved.
• D)Analytical procedures are performed by studying plausible relationships between financial and nonfinancial data.

Classify events after the reporting period as adjusting or non-adjusting events and understand their impact on financial statements.

Understand how to calculate expected holding-period returns for stocks.

Familiarize with calculating variance and standard deviation of stock returns.

Grasp the concept of nominal, real, and after-tax rates of interest.

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